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Divorce insurance issues facing Supreme Court

Rhode Island residents understand that divorce carries various family law issues along with it. Divorce proceedings bring along issues of alimony, child support, child custody and various property issues. Divorce also brings up issues with insurance and who is entitled to what. This issue is now before the Supreme Court.

The justices are analyzing a case out of Virginia in which a man decided to make his current wife the beneficiary on his group life insurance policy. The couple later decided to get divorced and he re-married. The man never changed over the policy to put it in the name of his new wife. Upon his death, the first wife was given the proceeds.

Under state law, beneficiary designations are reverted back to the current spouse. The Virginia Supreme Court, however ruled in favor of the first wife and held that federal law preempted the state law. Since the first wife's name was on the policy, she should be awarded the proceeds. Congress was very hesitant to get involved in divorce matters. The Supreme Court will now have to get involved.

When a couple goes through divorce proceedings, property is allocated as being community or separate property. Typically, insurance issues and policies would be handled at the same time as other property issues. However, if a situation arises as the one above and the policy holder does not switch over the name, it might be presumed that this was intentional as party of the divorce settlement. Or, it could have been an oversight. It is important that individuals going through a divorce seek answers and discuss all possible issues with qualified individuals.

Divorce is a challenging time and can bring up many complex issues. There are family law professionals that are available to make sure one's rights are protected.

Source: The Huffington Post, "Divorce Laws: Supreme Court Deciding Whether Ex- Or Current Wife Should Get Insurance Money", April 22, 2013

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